Asian stocks rise as Japan’s Nikkei rebounds

V.Phani Kumar

ShriNavaratnam

LeslieShaffer

HONG KONG (MarketWatch) — Japanese shares rebounded to lead most Asian markets higher Wednesday as cheap stock valuations attracted buyers after a hefty recent selloff despite fears about high radiation levels at an earthquake-damaged nuclear complex.

Japan’s top government spokesman said radiation levels had again spiked Wednesday morning at the Fukushima Daiichi nuclear plant, but added that radiation levels fell shortly afterward and there was no need to expand the evacuation area around the plant based on current data.

Strong aftershocks and a short supply of daily essentials at some retail counters also kept the nation on edge.

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The Nikkei Stock Average (NI225), which slumped 10.6% on Tuesday for its biggest one-day drop since October 2008, recouped some of those losses to finish 5.7% higher.

“It appears that equity markets in the region have been hit so hard that they are oversold,” said Macquarie Private Wealth division director Martin Lakos. “But the markets are going to react to whatever news comes out of Japan. This is about risk aversion rather than fundamental values or the impact on global growth.”

“There appears to be some hedge fund buy-backs following [Tuesday’s] panic-selling” in Japan, said Cosmo Securities equity strategist Toshikazu Horiuchi. But he cautioned, “unless the nuclear-power plant issues are resolved, the reconstruction efforts will not be able to start and only then can we gauge the impact [of the earthquake] on earnings.”

“It will take time until we accurately know the impact on corporate earnings,” said Naoteru Teraoka, general manager at Chuo Mitsui Asset Management, adding that a continuation of power cuts will have a longer-term impact on output.

But some analysts remained positive in their stocks’ outlook. Those at Credit Suisse said they haven’t altered their overweight view on Japanese equities and that after Tuesday’s steep fall, the stocks were cheaper than in global markets.

Tokyo Electric Power Co. (9501)
TKECY, +14.91%
was one stock that didn’t participate in the day’s rally. The company, which owns and operates the damaged nuclear plant, slumped another 24.7%, on top of its 42% plunge in the previous two sessions.

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